Berlusconi attacks euro

Italian prime minister Silvio Berlusconi called the euro a "disaster" and a "rip-off" that "screwed everybody" in a vitriolic attack on opposition leader and former European Commission president, Romano Prodi.

"There are categories of Italians who face difficulties because of the incursion of Prodi's euro", he said, according to newswires, adding that Mr Prodi got a raw deal for Italy's adoption of the single currency, leading to the country's recession today.

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The colourful leader, who made headlines last month by claiming his "playboy" charms seduced the Finnish president into backing down on a European food agency conflict, issued the comments at Forza Italia's national conference in Rome on Thursday (28 July).

The remarks come hot on the heels of a campaign to bring back the Italian lira as a parallel currency to the euro by Forza Italia's coalition partner, Lega Nord.

A recent HSBC bank report entitled "European meltdown?" also suggested that countries such as Italy, the Netherlands and Germany might benefit from switching back into weaker currencies.

Pre-election rhetoric

Most economists wrote off the outburst as empty rhetoric ahead of the May 2006 general elections, with a recent opinion poll by Corriere della Sera showing Mr Prodi's centre-left group six points ahead of Mr Berlusconi.

European Commission spokesman Gregor Kreuzhuber said there are "hundreds" of studies showing that the euro is not a problem for the Italian economy.

"There is not the slightest doubt that the introduction of the euro has been beneficial for European citizens and Italian citizens, as well as for the European economy and the Italian economy", he said.

And former European Monetary Institute head, Alexandre Lamfalussy, recently speculated that Italy's public deficit, which already stands at 4.3 percent of GDP, would double if Rome ditched the euro.

Some right-leaning Polish parties have also sought to make political capital out of euro-bashing ahead of upcoming elections, with the French and Dutch no votes on the constitution marking an open season for all things EU in the political jungle.

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The world's second biggest bank argues some countries might "benefit" from leaving the euro, suggesting Italy could be the first candidate to leave the single currency. The HSBC report comes as finance ministers consider steps against Rome's excessive fiscal deficit.

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